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i will say, however, that the value of doing it now in a low interest rate environment is substantially larger on these new loans for two reasons. the lower the interest rate, the faster the amortization of the principal and therefore this will be a more valuable change. second because these loans are so low interest rate, they will be on our books far larger. frankly, not many loans in the past have hit that limit. so even though it's $1 trillion portfolio, the value of that change is quite small for the old loans. it's really going to be quite valuable for these newer very low interest rate loans. >> i'll be briefly two more questions. i see that f.h.a. is now making loans to people who three years ago were foreclosed upon. and that's a very different standard than even exists at fannie and freddie. i don't understand. why are you doing that? >> this is another area where we are working on changes. here's the issue. we have a significant number of homeowners that were responsible homeowners, had good credit scores that lost their jobs in the biggest economic crisis this country has fa
i will say, however, that the value of doing it now in a low interest rate environment is substantially larger on these new loans for two reasons. the lower the interest rate, the faster the amortization of the principal and therefore this will be a more valuable change. second because these loans are so low interest rate, they will be on our books far larger. frankly, not many loans in the past have hit that limit. so even though it's $1 trillion portfolio, the value of that change is quite...
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Dec 6, 2012
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in that environment, commonplace is essential. it -- if you go through the last campaign, it is not that big of an area. compromise is required. give-and-take -- people have to accept some things they do not like as part of a larger agreement. i would say getting a comprehensive agreement now that resolve's many of these issues would at least reduce the constant threat of government shutdown. that is why this is so important going forward. >> i would remind everybody we have threats of government shut down in the past -- the famous showdown with newt gingrich and clinton. when you have divided government, you have clashes of major philosophical difference. the key is being able to have an element of compromise as part of that process. that is exactly the place we are in right now, trying to find that point. >> the best model for all of you who are working so hard on this may well be speilberg's movie about lincoln. lincoln made deals. you know what, he achieved great, great goals. it goes to the point you are making -- politicians
in that environment, commonplace is essential. it -- if you go through the last campaign, it is not that big of an area. compromise is required. give-and-take -- people have to accept some things they do not like as part of a larger agreement. i would say getting a comprehensive agreement now that resolve's many of these issues would at least reduce the constant threat of government shutdown. that is why this is so important going forward. >> i would remind everybody we have threats of...
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Dec 5, 2012
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some rate changes, some base broadening, but let's see what the traffic will bear, but the political environment, the culture on the hill will accommodate. >> dave camp and sander levin cut a deal? >> begin the process and try to confer. if there is a new revenue source, carbon tax, some sort of consumption tax, it will emerge out of their common frustration that they cannot get where they need to go. what we need to do is do not micromanage, don't be prescriptive. give them a number, a ratio of expenditure reductions to tax reform, revenue enhancements, and if that task falls to the -- and give them that task this fall to the committee and over the next six or nine months, task them to meet those numbers. i think the capability is there to do it. it may not be rostenkowski and packwood, but if there is a will, they will get the job done. >> i do not think it is credible to kick the can down the road that far at this point. i think the reaction in the real economy would be devastating. you have to imagine what you are suggesting, vic, which is a good suggestion in the context of doing something
some rate changes, some base broadening, but let's see what the traffic will bear, but the political environment, the culture on the hill will accommodate. >> dave camp and sander levin cut a deal? >> begin the process and try to confer. if there is a new revenue source, carbon tax, some sort of consumption tax, it will emerge out of their common frustration that they cannot get where they need to go. what we need to do is do not micromanage, don't be prescriptive. give them a...
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Dec 6, 2012
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there is a price to pay, the price is paid by the american people and your businesses and economic environment worldwide. through that. john engler -- he and i philosophically don't agree on much -- \[laughter] >> i'm just being honest about john, he is a great politician and comes from the other party, but john is exactly right when he says that the only thing that debt ceiling for is to destroy your credit rating. so i want to send a very clear message to people here. we are not going to play that game next year. if congress in any way suggests that they are going to tie negotiations to debt ceiling votes and take us to the brink of default once again as part of a budget negotiation, which by the way, we have never done in our history until we did it last year, i will not play that game. we have to break that habit before it starts. so, with that, let me just say, we have one path where we resolve it fairly quickly. cuts. we reform our entitlements. increases. you get business certainty and you do what you do best, innovate, hire workers, make profits, do well by your shareholders and grow a
there is a price to pay, the price is paid by the american people and your businesses and economic environment worldwide. through that. john engler -- he and i philosophically don't agree on much -- \[laughter] >> i'm just being honest about john, he is a great politician and comes from the other party, but john is exactly right when he says that the only thing that debt ceiling for is to destroy your credit rating. so i want to send a very clear message to people here. we are not going...
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Dec 7, 2012
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are we in a low-interest rate environment today? maintaining current policy a least three years or so should that be the prevailing environment assumption? >> you make a very important point in terms of the fact that the review was done not today but at a point with economic projections in july, over the summer. it is accurate that interest rates have dropped further than were built into the primary, actuarial view. there are two factors to that. home prices have performed better than were used in the actuarial. it would be significant lead better -- significantly better today just on that one variable. the second point is that the view is a point in time that assumes we do no further fha business. one of the things that is artificial about it is that, when interest rates go lower, it assumes piecer -- people pay off faster. that is accurate. what it does not take into account is half of those folks typically refinanced into a fha loan. by the nature of the actuarial, it takes a snapshot of time assuming you are closing down the fun
are we in a low-interest rate environment today? maintaining current policy a least three years or so should that be the prevailing environment assumption? >> you make a very important point in terms of the fact that the review was done not today but at a point with economic projections in july, over the summer. it is accurate that interest rates have dropped further than were built into the primary, actuarial view. there are two factors to that. home prices have performed better than...
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Dec 5, 2012
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>> it feels like a different environment. i do not know, but right now we are in the middle of a political test of wills on marginal tax rates. nots interesting we're fighting on the underlying principle, which is that wealthy ought to pay more in order to help us close debts and deficits, get our economy back on track. right now the president thinks he won a point, was vindicated by his victory in the election, and republicans did not want to do that, but he has the good hand in this struggle. restoring the clinton tax rates is something i would support. we supported them back in 1991 when bill clinton was running for president. no problem on that. it is a reasonable adjustment, but may not be sufficient to reach the targets we need, and it does not help us in bipartisan bargaining, reaching a deal. i hope as this negotiation -- we ought to be at the irish times -- that they will not make a fetish of marginal tax rates if they should go up some, but do they need to go back where they were? i do not know. lots of ways to incr
>> it feels like a different environment. i do not know, but right now we are in the middle of a political test of wills on marginal tax rates. nots interesting we're fighting on the underlying principle, which is that wealthy ought to pay more in order to help us close debts and deficits, get our economy back on track. right now the president thinks he won a point, was vindicated by his victory in the election, and republicans did not want to do that, but he has the good hand in this...
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Dec 5, 2012
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it is because they grew up in a -- an unstable home environment. they grew up in dangerous neighborhoods with no access to healthcare. they're often raised by heroic single parents and sometimes an elderly grandmother. they may not have a chance to participate in afterschool to these -- activities because their parents are working and cannot pick them up. every day some amazing parent or caretaker is of her, and all of it to give these kids a chance at a better life. the research on this topic consistently found that children raised in tough circumstances struggle in comparison than children raised in more stable family settings. they face a higher risk of poverty and failing schools. have lower scores on standardized tests, lower grades, and a much higher chance of dropping out of high school or failing to attend college. this societal breakdown is not something the government has solved, but it is something they cannot ignore. you cannot separate economic well-being of of your people from their social well-being. but the federal government -- wha
it is because they grew up in a -- an unstable home environment. they grew up in dangerous neighborhoods with no access to healthcare. they're often raised by heroic single parents and sometimes an elderly grandmother. they may not have a chance to participate in afterschool to these -- activities because their parents are working and cannot pick them up. every day some amazing parent or caretaker is of her, and all of it to give these kids a chance at a better life. the research on this topic...